Community Development Block Grant (CDBG)

Neighborhood Stabilization Program (NSP)

October 17, 2008

www.neded.org

NEBRASKA DEPARTMENT NEBRASKA DEPARTMENT of of

ECONOMIC DEVELOPMENTECONOMIC DEVELOPMENT

(DED)(DED)

BRIEFING AGENDA

• About DED• Overview of the Program• Information Provided at Regional

HUD trainings• Preliminary DED Strategy and

Timeline• Open Discussion

DED’S MISSION

To provide quality leadership and services that enable Nebraska communities, businesses, and people to succeed in a global economy. We are here, equipped and ready, to assist you and your community in developing and capitalizing on economic development opportunities.

DED ANNUAL BUDGET 2007-08

Sources of Funds General Fund $ 6,654,968

Cash Funds 23,666,004 Federal Funds 21,861,622Total $52,182,594

Uses of FundsStaff $ 4,989,222Operations 6,644,287Aid/Grants 40,549,085Total $52,182,594 

DED ANNUAL BUDGET 2007-08

MAJOR AID PROGRAMSCommunity Development Block Grant (CDBG)

Affordable Housing Trust Fund (AHTF)

HOME

Customized Job Training

Manufacturing Extension Partnership (MEP)

Microenterprise Fund

Value Added Grants

Building Entrepreneurial Communities (BECA)

Tourism Marketing

Planning

Public Facilities

Water/Waste-Water assistance

Tourism Development Initiative

Downtown Revitalization Initiative

Community Revitalization

Housing

Non- NSP CDBG – TYPES

National Objectives: 1) benefiting low- and moderate-income persons; or2) aiding in the prevention or elimination of slums or blight; or, 3) meeting other community development needs having a particular urgency because existing conditions pose a serious and immediate threat to health or welfare of the community and other financial resources are not available to meet such needs.

Non-NSP CDBG

2000-2007 CDBG ANNUAL FUNDING TREND

2000-2007 Community Development Block Grant Annual Distribution of Funds Trend

$10,000,000

$12,000,000

$14,000,000

$16,000,000

2000 2001 2002 2003 2004 2005 2006 2007

2000 2001 2002 2003 2004 2005 2006 2007

$14,314,200 $14,893,290 $14,563,490 $13,646,840 $13,907,146 $13,204,567 $12,346,602 $11,729,271

* This chart represents the anticipated five percent decrease in CDBG funding in 2007.

2008 HOUSING FUNDS AVAILABLE

$1,000,000 CDBG

$5,000,000 HOME

+$10,000,000 NAHTF

$16,000,000

NEB. AFFORDABLE HOUSING TRUST FUND

• Financed with a documentary stamp tax

• $1.20 tax for every $1,000 of valuation

• All real estate transfers

• Approximately $10 million per year

• Began in 1998 with documented need of $20 million per year minimum

Housing Activities

• Homebuyer programs• Owner-occupied rehabilitation programs• Non-profit operating assistance• Rental housing

State of Nebraska NSP

• Allocation to the State of Nebraska– $19.6 million– DED grant submission due December 1, 2008– Funds committed by18 months of HUD signing

grant agreement– Allowed administration – 10%– Proposed State Administration – 4% ($785,000

total over 4 years+)– Proposed grantee administration – 4%– Additional funds available for activity soft costs

DED CDBG NSP – Eligible Activities

• Establish financing mechanisms for purchase and redevelopment of foreclosed homes and residential properties;

• Purchase and rehabilitate homes and residential properties abandoned or foreclosed;

• Establish land banks for foreclosed homes;

• Demolish blighted structures;

• Redevelop demolished or vacant properties

DED CDBG NSP – Eligible Grantees

• Local Governments – including Lincoln and Omaha

• Non-profits – including quasi-governmental agencies

NSP – Serving the lowest income

• 25% of the funds ($4.9 million) must be used to house households with incomes at or below 50% AMI through any of the five eligible activities– Homebuyers – Renters– Lease-purchase – Special Needs projects such as transitional

housing for the homeless– Habitat for Humanity partnerships

NSP allocation priority

• Allocation of funds must give priority to areas with – (1) the greatest percentage of home

foreclosures;– (2) with the highest percentage of homes

financed by a subprime mortgage related loan; and

– (3) identified by the state as likely to face a significant rise in the rate of home foreclosures

NSP allocation priority

• Preliminary data suggests the following areas have the greatest need:– (1) Areas of North Omaha– (2) Douglas County, Sarpy County, Cass

County and Washington County

• Areas most likely to see a rise in foreclosures are the more populated communities

• This information will be further substantiated & priority areas may change

NSP Eligible Activities

• Not limited to housing as an outcome

• Not limited to foreclosed properties

• Must meet a national objective defined as– Low Moderate Middle Income Housing benefit– Low Moderate Middle Income Area benefit– Low Moderate Middle Income Jobs benefit

• May require request for special permission

• Low Moderate Middle Income = < or = to 120% Area Median Family Income

Summary of HUD Training (I)

• Emphasis these are CDBG funds• If NSP is used with other federal funds, most

restrictive requirement applies• Environmental Review requirements same• URA and 104(d) [acquisition/relocation]

requirements different – – 1 for 1 replacement is not required

• Lead-based paint requirements same• Housing at 50% AMI – rentals and special

needs

Summary of HUD Training (II)

• Quickly awarding & using funds critical

• Reporting will be on an address-level basis (like HOME)

• Rental projects -HOME program affordability requirements

• Not eligible– Foreclosure prevention– Demolition of non-blighted structures– Purchase of properties not abandoned or

foreclosed upon

Summary of HUD Training (III)

• Program Income could be very complicated

• Extraordinary oversight as a high-risk program– DED oversight of Grantees and subrecipients– HUD oversight of DED– HUD Office of Inspector General Audits

oversight of HUD, DED, & Grantees– HUD OIG Investigators oversight of all– General Accounting Office oversight of all

DED NSP Timeline (I)

• Proposal Pre-applications available October 16

• Proposal Pre-applications due Nov. 3

• Proposed Grant Nov. 7

• Proposed Grant Submission public comment period Nov. 7-21

• Finalize Grant Submission November 25

• Deadline to submit to HUD December 1, 2008

DED NSP Timeline (II)

• HUD approval of plan

February 13, 2009

• Additional project applications accepted

• Project application reviews and commitments on an ongoing basis until June 30, 2009.

• MUST have commitments by June 30, 2009.

NSP Allocation Strategy

• DED can change this strategy based on pre-applications received

• Funds may be allocated to different strategy categories based on capacity of the applicant and readiness to proceed

• DED must rely on the Consolidated Plan for Omaha and Lincoln, therefore, requesting overall priorities from the City of Omaha and the City of Lincoln

DED CDBG NSP Allocation Strategy (1)

What?

Housing Projects that will house households with incomes at or below 50% AMI

Where? Omaha

How much? $4,000,000

Grantee? City of Omaha

DED CDBG NSP Allocation Strategy (2)

What?

All eligible Projects

Where? Omaha MSA (Douglas, Sarpy, Saunders, Washington, Cass county)

How much? $3,230,000

Grantee? Local Government – housing activities

Local Gov’t or non-profit for non-housing activities

DED CDBG NSP Allocation Strategy (3)

What?

Housing Projects that will house households with incomes at or below 50% AMI

Where? Lincoln

How much? $1,000,000

Grantee? City of Lincoln

DED CDBG NSP Allocation Strategy (4)

What? All eligible Projects

Where?

Lincoln MSA and Sioux City IA- NE -SD MSA (Lancaster, Seward, Dakota and Dixon counties)

How much? $1,600,000

Grantee? Local Government – housing activities

Local Gov’t or non-profit for non-housing activities

DED CDBG NSP Allocation Strategy (5)

What?

All eligible Projects

Where? Communities with population over 20,000 not included in MSAs (Norfolk, Columbus, Grand Island, Hastings, Kearney, North Platte, Fremont)

How much? $4,500,000

Grantee? Local Government or non-profit

DED CDBG NSP Allocation Strategy (6)

What? Eligible community redevelopment projects and demolition programs

Where? All other Nebraska communities

How much? $3,700,000

Grantee? Eligible Non-Profit or local government

NSP Allocation Strategy (6) continued

• Demolish blighted structures only• HUD pre-defined area with 51% of

population at 120% AMI• DED pre-defined area determined to be likely

to have an above average percentage of dilapidated housing OR completion of a survey tool to define an area as such

• Highly recommend regional programs for small communities

• Maps and survey tool available by Nov. 6

ADDITIONAL RESOURCES

Nebraska Development Districts

Pre-application

• NOT REQUIRED

• Should submit if you have a general project idea that may be included in the Plan to HUD.

• Complete to the best of your ability, a full application will be available later

• Think creatively – new program not all parameters are defined, yet

www.neded.org

Questions?

Lara HuskeyDirector, Community and Rural Development Division

CDBG NSP Program Manager1.800.426.6505402.471.3759402.326.1027

lara.huskey@nebraska.govhttp://www.neded.org/content/view/818/156/